Topic: Why I am now not enthused about increasing the block size - page 2. (Read 2444 times)

One thing I think you need to be very careful of when you decide upon this is just how getting rid of arbitrary restrictions could actually cause severe centralisation.

Already miners in China has resorted to using an SPV approach due to the GCF (Great Chinese Firewall) slowing down all international internet traffic. So if all limits are removed then you have just removed the world's 2nd (soon to be 1st) biggest economy from even participating in mining. Is that a good idea?

And if you keep going in that direction then Africa is killed and India then Australia and eventually Europe and South America and you are pretty much just left with the US and Canada (I am guessing the region where you probably come from).

I think that Bitcoin is great for using as a payment system, which is why we should not allow the blocks to get consistently full because that renders transactions unreliable. I accept cryptocurrencies at a brick and mortar store I am responsible for and if the blocksize is not increased, I will have to stop accepting Bitcoin and I will only accept altcoins like DASH instead because of this issue. Transactions are instant and I do not wait for confirmations at this store, and for most other things I use payment processors like Bitpay, I found it to be both convenient and fast. I am also ideologically motivated to use Bitcoin instead of Fiat for as many things as I can, we should not underestimate this ideological motivation that some people might have.

Using Bitcoin as a payment system does not compromise its security or its decentralization, it actually strengthens it. Since giving Bitcoin more utility gives it more value which in turn increases its security. When adoption is increased decentralization is also increased because of more people running full nodes and mining. Bitcoin is like the gold coins of ancient times, both used as a commodity and a currency.

We should not arbitrarily restrict the blocksize. We should allow the blocks to grow as big as they need to while keeping the technological limitations in mind in order to preserve the principles of decentralization and financial freedom.

Credit cards are costless to us and send money instantly as well. It's fairly obvious Bitcoin doesn't compete and certainly does not offer a superior product on these grounds.


It seems you pretty much confirm CIYAM's point which is that there is little incentive for the consumer

Whilst this may indeed be possible it is something that is not being really used at the moment and I think it will require specialised software to do this which basically means that merchants are still going to use payment processors rather than just say a Bitcoin client (personally I think that we don't want to even have payment processors in the future).

Basically I think that the 1 MB limit has actually been a good thing in showing us all the issues that Bitcoin as a payment system has (beyond the confirmation times).

Hopefully these issues will all be resolved over time and Bitcoin can become a realistic alternative to other payment systems but I don't think this is likely to happen for at least some years (but its other great use cases such as person to person transactions are functioning very well right now).

I think this is exactly why we need larger blocks, so that there is no need to wait for multiple blocks for a tx to confirm, provided that a CPFP tx includes a sufficiently large tx fee.
Not at all, however there are similar risks with accepting credit cards, however these risks can be mitigated with CPFP, and if the customer is still in the store then the manager can speak to the customer about the fact that their transaction is not going to confirm (which is not going to be the case for a customer whose "transaction" "fails" up to 180 days later when a credit card dispute is filed)

Benefit from an irreversible payment? Very little, however there are other benefits to the customer, primarily (current) low cost of use and the ability to send money instantly (yes, I would argue that bitcoin transactions are for all intensive purposes instant from the viewpoint of the customer, regardless of confirmation time)
If Child Pays for Parent (CPFP) was more widely adopted and supported by the miners as a whole then this would generally be a non-issue, and would be even less of an issue if blocks were sufficiently large such that they are not full even during peak periods.

If CPFP were more widely used then a merchant could receive a zero fee transaction from it's customer and then spend outputs from that transaction and include a sufficiently high tx fee so that both tx's get confirmed then the cost of receiving a BTC payment would essentially be absorbed by the merchant, which is the statuesque for Credit Card payments.   


People would use Bitcoin to to pay for something online because of the lower cost. To counter the fact that payments cannot be reversed, consumers should only deal with companies that have a sufficient reputation that they can trust items will get delivered, for example if an Amazon order does not get delivered, I would think that the majority of the time Amazon can resolve this issue prior to the customer ever contacting their credit card company (yes this will lead to more centralization, and yes this will make it more difficult for newcomers to enter the market online).

Consumers can also use Bitcoin in person in similar ways that they use cash in person. If someone were to trust a mom and pop store to hand them $500 for a TV, then there is really no reason why they would not trust them with $500 worth of Bitcoin for the same TV. Such store could probably even offer a discount for paying with Bitcoin over cash because of the lower costs associated with protecting bitcoin over cash.

I'm not sure what you mean by "involved in the blockchain.info project" (as I've never even used it as a wallet and I certainly never did any work for them) and of course offchain txs are a reasonable solution (I have not said that they aren't).

It is people that keep on insisting that Bitcoin should be used for all txs (big and very small) that I think are just not being realistic about what Bitcoin (at least in its current form) has been built to do and do well.

Some people in the world don't have fast internet, or high storage. Also, i'm a user of Bitcoin Wallet on my phone, I can't imagine what it would be like to have to download 8x more data.

Ciyam.. as you are a person who was involved in the blockchain.info project, im certain that even you know that offchain tx's is a very easy thing to impliment, to send tx's instantly between users without touching the actual blocks..

after all people dont do bank transfers for a cup of coffee using swift. they use third party services such as visa. so offchain is a solution.
why do you think apple now want you to pay with applepay for itunes.. because its alot easier then asking for 70c from visa everytime..

secondly its easy to check a receiving TX, see what address it came from and check if the originating funds already have confirms to not delay things in regards to the new tx the shop just received.. plus if your going to do it. you would also push the TX to all the miners, just incase the customer has only pushed it to a explorer service nodes in attempt to try look like its been received but still not quite entered the mempool of miners.

im kind of surprised your coming up with these objections, especially with your experience

Actually in the specific case of something like a cup of coffee it is the vendor who will be taking a big risk if blocks are near to full (be they 1MB or 10MB) as there are multiple threads about txs that never confirm.

How hard would it be to write a simple little wallet that purposely crafts txs that won't confirm (before they are dropped from the mempool)?

As soon as that kind of thing is reported (assuming it does occur) then you will see merchants spooked and stop offering Bitcoin as a payment option (which is also why I don't see any urgency to push for Bitcoin to be used as a general purpose payment system).

most things like cups of coffee in starbucks wont need confirms or reversibility.. because the coffee buyer can slap the barrista in the face with a wet fish if the customer doesnt get their coffee after payment.

but if your talking about a $4 keyboard and mouse from some chinese supplier.. then thats slightly different.
that being said the news has reported that silk road alone has done millions of small transactions even with nefarious merchants and there hasnt really been a problem with the buyer-seller relationship.

so buying a snickers in a walmart or a coffee in starbucks is no issue at all. they have their own codes of conducts which protect customers no matter the currency. the only issue is the 'stranger danger' transactions with people thousands of mile away.

Honestly it has been exactly "cups of coffee" that many of the large block size proponents have been using as their own mantra (this particular use case certainly didn't start with me).

In any case I am referring to small payments that currently you would be far more likely to be using a credit card and for which reversibility is something that one would want without much hassle (you don't want to have to involve a lawyer to get back 10 dollars from a bad merchant).

Again for person to person transactions Bitcoin works extremely well (I have purchased Bitcoins for RMB in the past for people that had visited China a few years back).

This is true. Also keep in mind that the merchants also face the risk of chargebacks and frozen funds. It can bee a nightmare.

Merchants have to wait a long ass time to receive the actual cash from the card company. It gives the illusion of being instant but it's the merchant who has to swallow the wait.

I've never understood why those against increasing the blocksize *insist* that their opponents are always about "paying for cups of coffee".

Not all consumer transactions are in the $1-$3 range. Strange to relate, but many things that people want to buy cost MORE than three dollars. Sometimes a lot more.
Why should an advocate of bitcoin-as-payment-network, concerned about their future ability to buy

a) a computer game,
b) the week's groceries,
c) a laptop PC,
d) their monthly mortgage/rent/utilities,
e) a used car,
f) a new car,
g) a mansion on a tropical island,

with bitcoins, always have to defend their stance as if they were talking about cups of coffee?

I look forward to a day when I can pay at least items in the categories (b) and (d) using Bitcoin. But no, ignore *everything* I just said, I JUST WANT TO BUY CUPS OF COFFEE.

Why do this?

If you advocate for small blocks you are not only forcing three-dollars transactions off the chain. You're going to restrict thousand-dollar transactions too, they'll just drop off the chain a little later. If you're fine with that, have the basic intellectual integrity to declare that you are. Don't distort the debate with frankly stupid memes about cups of coffee. CIYAM, can't say I know you that well but you seem like a decent sort and I'm surprised you'd frame things that way.

I agree with you that the benefits of BTC to purchasers have been oversold. One benefit though, is that if Bitcoin reduces payment processing costs for merchants, consumers should see these passed on as discounts on their purchases. But of course that relies on merchants passing on at least some of their savings, which too few are prepared to do.
Of course I understand shoestring operations may not be able to - if they're just baaaaarely above water with credit card processing fees, they're not going to get to hookers-and-blow territory when they accept BTC. But mortgage lenders, utility companies, supermarkets - they seem to me to be good examples of sectors which (a) can afford to pass savings on to consumers, and (b) will pretty much have to, to stay competitive, at least once the first snowball starts rolling.

The problem with bitcoin as a payment method is it's transaction time, you have to wait around 10 minutes before you receive 1 confirmations. But with credit cards the seller instantly receives his money.

The problem here is I'm the fucking customer

( *see here for further info* )

unfortunately, "the customer is always right" 

Don't get me wrong this will happen, I'm not saying either that Biticoin doesn't hold great promises as a transactional currency but we are not there yet.

It benefits the seller, not the buyer

Though, I'm not selling anything

And I got 160$ limited on PayPal for 180 days, so yeah, I like that bitcoin is irreversible

Main benefit of bitcoin is that it's all yours, no one can take it away from you, once you have it, you have it

There's no PayPal who can limit you for no reason ( *see here* ), there's no scammer who can perform a chargeback, there's no scammer who can fake unauthorized access, there's no goverment who can seize it (well, if you encrypt it and store it properly   )
You can rest in peace once you get it, god forbid you sell digital goods with PayPal, would be safe to assume if you got 200$ on your balance you would get 40 after 6 months